Warren Buffett and the Interpretation of Financial Statements

The Search for the Company with a Durable Competitive Advantage

By: Mary Buffett, David Clark

Narrated by: Karen White

Length: 3 hrs and 10 mins

Publisher's Summary

Mary Buffett and David Clark clearly outline Warren Buffett's strategies in a way that will appeal to newcomers and seasoned Buffettologists alike. Inspired by the seminal work of Buffett's mentor, Benjamin Graham ( The Interpretation of Financial Statements, 1937), this book presents Buffett's interpretation of financial statements with anecdotes and quotes from the master investor himself.

Potential investors will discover:

Buffett's time-tested dos and don'ts for interpreting an income statement and balance sheet

Why high research and development costs can kill a great business

How much debt Buffett thinks a company can carry before it becomes too dangerous to touch

The financial ratios and calculations that Buffett uses to identify the company with a durable competitive advantage - which he believes makes for the winning long-term investment

How Buffett uses financial statements to value a company

What kinds of companies Warren stays away from no matter how cheap their selling price

Once audiences complete and master Buffett's simple financial calculations and methods for interpreting a company's financial statement, they will be well on their way to identifying which companies are going to be tomorrow's winners - and which will be the losers that should be avoided at all costs.

Destined to become a classic in the world of investment books, Warren Buffett and the Interpretation of Financial Statements is the perfect companion volume to The New Buffettology and The Tao of Warren Buffett.

©2008 Mary Buffett and David Clark (P)2008 Tantor

Skip to chapter 12

If you have any kind of business or financial background, or if you have read other Warren Buffet books, I would suggest jumping straight to Chapter 12 of the print copy (which is 6:35 into Chapter 3 on the Audible version). The real golden nuggets of this book are placing a "Buffett interpretation" on cold hard numbers, and providing motivation to read financial statements from other companies to see how they stack up against each other. The first few chapters are very basic, and you may get the idea that the whole book is at that level. It isn't. There's a good structure for evaluating companies, and a great starting point for organizing and executing the evaluation of your current and potential investments. So read the book, make notes, and get to work!

A great basic walk-through

Being a Buffett-based book, it is aimed at building a buy-and-hold portfolio. It distinguishes Mr Buffett's approach from that of his mentor in value investing, Mr Graham. While Graham fished for underpriced stocks of all kinds, and unloaded them when certain criteria in gains were met, Buffett looks for more durable advantages for long-term returns on investment.
I would term this "introductory," in reciting basic financial statement contents, meanings and inferences about companies one can get (pretty readily) from financial statements that are publicly available. Aside from the endless repetition of certain phrases ("durable competitive advantage," "getting rich"), it is highly listenable and chock-full of logic and common sense. It was a nice refresher for my financial accounting basics with added value, since my financial accounting class covered a lot of nuts and bolts, but not much about interpretation. While some of these points were apparent from my own observations, much had not occurred to me, e.g., aspects of a company's investments in other companies. There are red flags here that help show potential hard sledding ahead for companies. This got me thinking about lots of companies in today's landscape in different ways, in terms of challenges they face.

Must Know Accounting

If you are a Warren fan, like I am, then this is how he gets it done.
If you don't know how its's done, then this gives you a great start to understanding where to begin.
Since the market is always in the daily news, and if you are not a sports fan like I am, but want to be able to understand why the market is driven up or down, then this simplified book does the trick.
Don't get me wrong, this is a simple read on a very complex subject, but reader, of whom I am a great fan for light fiction, does this book justice.
Note: I did listen at new 1.25x speed to get author's intent, and to quickly understand what it is I don't know.
You can learn anything, but it take focus and drive to do it. This book gives you a great place to start.
The Tao of Warren, is great as it helps you to understand Warren's methods, and it motivates you to buy this book which helps you to know what you must be able to analyze.
Yes, there is some ABC's, always be closing, in the few exposures to Warren I've had.
I have seen him speak in Omaha along with Charlie Munger, and all I can say is captivating and spellbinding!
After you listen to this book, you will truly appreciate the genius Warren has on this subject.
This book is a bit dated, as Warren now has learned about Tech investments, and has added these to his portfolio, but the basic methods still holds true.
I have purchased the hard bound copy to use as an encyclopedia.
Were these comment helpful?

Get super rich by finding a company with a durable competitive advantage

If I could have received a dollar for each time those two phrases were mentioned I would be super rich too, just like Warren Buffet. Enjoyed the information, however I felt there was too much emphasis on being and getting super rich just like Warren Buffet by finding companies with a durable competitive advantage . I was looking more for information on financial statements...

New perspective when looking at financials. Not full book though

Why is this not the full book? You can tell because it skips chapters. However, this is a new perspective for interpreting financial statements that you don't get from simply reading a "how to".

Good basic to intermediate financial analysis concepts

Not for the advanced financial analyst, but most will get a few nuggets from this book.

Excellent teaching points about Buffet's style

Great listen and informative
Short and sweet
Brief review as it was meant to be
Worth listening several times
Pleasant narration

VERY Informative

I listened to this book with Excel and Word open. You will probably rewind and listen to things over. This book is packed with useful information!

Analysis Gold!!!!

Great 3 book series, Even if you dont purchase stock from one of these great company, Warren laysout the blue print of how you should run your own business (if you have one), and how to keep your books.

Wonderfully Useful!

This is how "how to" books should be written -- a guide to accomplishing a task, pointing out signposts signaling great (or mediocre) investing opportunities.

This simple book put the majority of "The Little Book" series to shame.

If you're a Value Investor ... Buy! Buy! Buy!